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Blog: Will supermarket case be a wake-up call for insurers?

The Supreme Court has given a surprising decision, which will serve as a rather rude wake-up call for employers and insurers alike.

In the case of Mohamud v WM Morrison Supermarkets, the court has ruled that the employer was vicariously liable for the actions of its employee, providing further uncertainty around when employers are liable for the actions of their employees, even if these acts appear unrelated to their work.

To give some detail, the claimant, Ahmed Mohamud, had visited a Morrisons petrol station and asked Amjid Khan, the supermarket's employee, to print off some documents for him.

The employee responded with racist abuse and then proceeded to follow Mr Mohamud out of the kiosk, telling him to never return to the petrol station. Mr Khan also punched Mr Mohamud in the head a number of times and kicked him, while he was curled up on the station forecourt.

The judge described this attack as "brutal and unprovoked", stating that Mr Mohamud was in no way at fault and had not behaved offensively or aggressively.

In making its decision regarding whether Morrisons was vicariously liable for this assault, the Supreme Court decided to apply the ‘close connection' test and identified two questions which had to be answered - what was the nature of Mr Khan's job; and was there a sufficient connection between the employee's position and his wrongful conduct to make it right for the employer to be held liable under the principle of social justice?

Although the court recognised that this ‘close connection' test was imprecise and that the lack of precision was inevitable "given the infinite range of circumstances where the issue of vicarious liability arises", it said the court has to make an evaluative judgment in each case.

It was recognised by the court that Mr Khan's job at the petrol station was to "attend to customers and respond to their inquiries.

His conduct in answering the claimant's request in a foul-mouthed way and ordering him to leave was inexcusable, but within the ‘field of activities' assigned to him."

Overall, the court was not prepared to accept that the significant connection between Mr Khan's employment and his conduct ceased when he came out from behind the counter and followed the claimant - he had not "metaphorically taken off his uniform" when he did so.

Significantly, the judge in this case recognised that as Mr Khan told Mr Mohamud not to come back to the petrol station, this was not something personal and although a gross abuse of his position, the order was in connection with his employment.

On this basis the Supreme Court overturned the earlier decision and found in favour of the claimant, holding the supermarket liable for the acts of Mr Khan - even though this instance of abuse and violence was evidently far outside anything authorised, or probably even contemplated, by the employer.

This case is an important decision for employers and their insurers alike and it is one which might come as something of a surprise to many.

The decision shows that not only can an employer be held liable for a wide scope of actions from an employee, but that this employee conduct can be far removed from something done for the employer's benefit.

In effect, by broadening the circumstances in which vicarious liability is upheld, this decision seems to fly in the face of Government attempts to limit the scope of strict liability in other areas. Consequently, the concept of vicarious liability is likely to assume greater prominence in employers' liability and public liability claims in the future.

Although the Supreme Court has recognised the lack of precision in the "close connection" test, such an approach does not, and cannot, bring certainty to what is a notoriously difficult and ever developing area of the law, and therefore it is now increasingly difficult for defendants and their insurers to predict whether vicarious liability will be upheld on any given facts.

The case does show however that the courts are prepared to hold employers liable for the acts of their employees which are far more removed from their work than many had anticipated.